Uber protesters are missing the point. Here's why.

Outraged at Uber, cab drivers have been protesting all around the world against the taxi-hailing app. But cab drivers and companies are better off focusing on changing themselves rather than fighting Uber, writes Richard Read.

By
Richard Read, Guest blogger /
June 13, 2014

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Philippe Wojazer/Reuters

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A yellow ribbon indicates a striking Paris taxi which takes part in a demonstration in the French capital June 11, 2014. Cab companies should focus on changing their business models rather than fight Uber, writes Richard Read.

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There are lots of great ways to make friends: a simple smile, a handshake, offerings of fudge.

Upending an entire industry that employs millions of people around the world? Not on the list.

But ridesharing/taxi startup Uber isn't here to make friends – at least, not with cab companies. The San Francisco-based outfit recently launched its app-based service in Europe, and taxis drivers across the continent staged protests. The question is: will those protests do any good?

All about Uber

When Uber launched as UberCab in 2010, we knew trouble was a-brewing. At the time, the company only employed licensed livery drivers, but it communicated with those drivers by smartphone, bypassing cab company dispatchers. That allowed drivers to work on two networks at one time, boosting their potential revenue.

Before long, Uber opened up its service to non-cabbies, and it was joined by competitors like Lyft and Sidecar. Taxi companies complained that this was unfair and dangerous: unfair because licensed cab drivers were forced to go through training and their vehicles were subject to costly inspections; dangerous because bypassing such regulations put naive passengers in potentially unsafe vehicles with who-knows-what-kind of drivers and left drivers unprotected from shady fares.

Like the war that Tesla is waging on conventional dealerships, Uber's war is far from won, but momentum appears to be on its side. And so, like many companies in similar positions, Uber has decided to expand – in this case, to Europe.

Not for alles

Like their American counterparts, Euro cabbies claim that Uber is dangerous and disruptive. Not only do protestors complain about Uber's lack of insurance, licensing, and regulation, but in cities like London, they insist that the company is in direct violation of the law. There, only select black cabs are allowed to charge metered fares, but by using smartphones to measure distance and time, Uber drivers do the same, cabbies claim.

Further south, in Spain, taxi drivers argue that they're being penalized for playing by the rules. There, taxi licenses can cost between €80,000 and €200,000 ($108,000 and $271,000 U.S.), but Uber drivers don't have to pay those fees.

What's more, many are concerned that Uber is taking advantage of the countries in which it operates, without giving back its fare share. Uber's base of European operations in is Holland, which minimizes the taxes paid out to Italy, the U.K., and other places it does business.

Our take

The taxi industry is overdue for a shake-up.

Many cab companies still operate using a 20th century model: travelers call for service, step outside, and wait for the cab to arrive. That may be appealing to our parents and grandparents, but for folks under 40, it's a different story. Like newspapers and record labels, the industry has resisted change for so long, it may be too late to fix it.

We understand that there are millions of hard-working cab drivers around the world who find this news unsettling. But Uber isn't booting them out of a job, it's changing the way they work to be more in keeping with modern technology and lifestyles.

Ultimately, protests like the ones staged yesterday in Europe make for good news stories, but they do little if anything to reform the industry or boost customer satisfaction. As proof, consider this: Uber said that the protests in London alone resulted in an 850% growth in the company's user base, as frustrated travelers tried to work around the traffic jams caused by cab drivers.

When your actions fail to persuade the public and instead drive them right into your competitor's arms, you need to rethink your battle plan.